Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

“I’m in the US – what if I just ignore the EU VAT changes?”

happybootstrapper.com

Post reply on HN
Print view View original

131–140 of 182 posts

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#131

Post by pietro »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

All taxes are astronomical in most of the EU, but with national differences.

In Denmark, in addition to a 25% VAT, there's an 8% payroll tax and a 40%-56% income tax, property taxes, huge environmental taxes, etc.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#132

Post by jkulmala »

oh_sigh wrote: post #115
pja wrote: post #12

Earlier quoted context omitted.

The point of the changes is to prevent large non-EU companies from going "VAT-shopping": like a certain well known advertising company claiming to sell all their services from a low VAT country when in fact all the business dealings are done in a tower block in the centre of London. Now they have to charge whatever VAT rate each country within the EU thinks is appropriate for their citizens & there's no "race to the…

Does placing advertising on web property count as a digital good?

Yes, as said, they have pretty much covered everything.

You can find some more detailed information here: https://www.gov.uk/government/publications/revenue-and-custo...

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#133

Post by jkulmala »

mrb wrote: post #98
jkulmala wrote: post #13

Earlier quoted context omitted.

Thanks for the correction, I updated the blog post.

jkulmala, the other part of your claim is wrong: "The change was made [...] to force them to move more operations to EU to get VAT reductions" . After Jan 1, 2015, there will be zero VAT-related incentive to move to the EU, because any company (EU or non-EU) will get the same VAT reductions: the VAT in the customer's country. Edit: yes, I meant VAT "reductions" not "payments". My point holds though: there won't be an…

It's not what they pay, it's what they get to reduce. If you purchase supplies etc. you get to reduce the VAT you've paid.

So if you have $0 VAT from EU purchases, but $40 VAT from sales, you pay $40. But if you paid $40 VAT from EU purchases, and have $40 VAT from sales, you pay out $0.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#134

Post by fargolime »

pc86 wrote: post #99
fargolime wrote: post #85

Earlier quoted context omitted.

> Categorically, unequivocally wrong Hyperbole much? They can charge you for services / products rendered and which aren't covered by insurance, and they can charge any price they want and you're legally obligated to pay it. Of 3 times I helped my parents with processing their hospital bills, it was over $10K in non-covered expenses each time.

Is your complaint that a hospital can charge you for a service that was rendered, that they perform services you might have to pay for, or that they assume you're not interested in rate-shopping your surgeon? Yes, you are legally obligated to pay for services rendered. I think you'll be hard pressed to find someone to argue the opposite, though.

The observation is, in EU countries with nationalized healthcare you don't get a hospital bill. In the US you can have good health insurance and still get a bill that bankrupts you and leaves you homeless. You can't rate shop in advance of getting rear-ended.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#135

Post by fargolime »

mikeash wrote: post #128
fargolime wrote: post #85

Earlier quoted context omitted.

> Categorically, unequivocally wrong Hyperbole much? They can charge you for services / products rendered and which aren't covered by insurance, and they can charge any price they want and you're legally obligated to pay it. Of 3 times I helped my parents with processing their hospital bills, it was over $10K in non-covered expenses each time.

You previously said "charge you for anything" which is substantially broader than "charge you for services/products rendered." Reading your previous statement literally (and I saw no reason to read it in any other way), it meant that a hospital could charge you for buying an elephant and you'd be legally obligated to pay. And you're complaining about other people using hyperbole?

They can charge you for some pretty ridiculous things, though. My mom got charged $175 every time an assistant nurse checked on her, 4 times a day. It wasn't reduced by insurance; instead they didn't cover it at all, so she was obligated to pay the $5000 charge.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#136

Post by Silhouette »

santacluster wrote: post #121
Major_Grooves wrote: post #43

Yes, this has been quite an amazing f-up by the tax authorities in the EU. I wrote a blogpost about it the other day: http://blog.satago.co.uk/2014/11/what-is-this-vatmoss-mess/ imo the major f-up is removing the tax threshold for selling digital goods - even if you sell a £1 kintting pattern you have to register for VAT now.

The really major f-up is that of online sellers (it's a major pain for sellers of physical goods as well, it's just easier for them to at least know which country they're selling to) who did absolutely nothing during the entire process of creating and implementing this change, and only now start to whine when it's way, way too late. The reasoning behind the law is perfectly logical, and the problem they're trying to…

The really major f-up is that of online sellers ... who did absolutely nothing during the entire process of creating and implementing this change, and only now start to whine when it's way, way too late.

And what exactly do you think an affected seller should have done if they had no reason to know these changes even existed?

Certain government representatives have been claiming that they have provided information and notified businesses. However, right now the Internet seems to have no shortage of small businesses who claim they had never heard of this change until very recently. I can certainly understand that: I personally run two businesses that could potentially be affected by these changes, both already VAT registered, yet I have no indication that our government has made any attempt to notify either company in any way about these changes.

Even some on-line payment services and marketplaces appear to have had no idea, and it looks like some won't be able to support the required taxation and record-keeping in time. These are the very organisations that many people in governments seem to have assumed will fix the problem because according to them almost every micro-business uses one!

This is one piece of legislation that could probably have been stopped or redirected quite early on, if those affected had just bothered to try.

I'm not convinced it would have helped even then. This is the same EU that imposed those mandatory cookie notices. More recently, they pushed through consumer protection regulations that mean if someone wants to buy a digital download and gives you their money today, the default is that you must not actually provide the data to them for two weeks, among other similarly unhelpful-to-anyone measures.

No doubt some of these measures were promoted with genuinely good intentions, but it is clear that the people writing the laws and regulations are completely disconnected from the realities of running a small business. It will be literally impossible for a lot of small businesses to comply with the letter of the law under some of the new rules.

The biggest irony of them all is that the most likely beneficiaries of these changes are... big US businesses, specifically those which function as on-line marketplaces and have the resources no small business does to investigate and comply with all the new taxation and reporting rules and to put up a serious legal fight if they are formally investigated for failing to do the impossible.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#137

Post by fargolime »

pc86 wrote: post #101
_delirium wrote: post #78

Earlier quoted context omitted.

It's true that they can't just make up services, but they can do a pretty wide range of things and bill you for them, without giving you the price in advance. My dad was in the hospital once, and got something like 20 separate bills, for different services he had no idea he had received (and had no way to verify if he had even received). And my mom actually did get a half-dozen or so bills for services she definitely…

Honestly I'd be shocked if an ER doctor knew the price of a service before doing. They probably know a general range (give or take a few hundred dollars?) for a given test, but even that I'm mostly guessing on. Unless they're a small operation, I don't know that they'd have any direct visibility into the billing/insurance/finance side of the operation. Maybe that is the issue? I don't know how to combat that in a lar…

I once asked the financial adviser for a hospital, how much the CAT scan will be. He said $1700. On the bill it was $4500. Here's how it really works, according to a relative of mine who works in the billing dept. of a major hospital: each month they decide how much to charge patients for services already rendered, so they can meet their monetary goals for that month.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#138

Post by adwf »

santacluster wrote: post #121
Major_Grooves wrote: post #43

Yes, this has been quite an amazing f-up by the tax authorities in the EU. I wrote a blogpost about it the other day: http://blog.satago.co.uk/2014/11/what-is-this-vatmoss-mess/ imo the major f-up is removing the tax threshold for selling digital goods - even if you sell a £1 kintting pattern you have to register for VAT now.

The really major f-up is that of online sellers (it's a major pain for sellers of physical goods as well, it's just easier for them to at least know which country they're selling to) who did absolutely nothing during the entire process of creating and implementing this change, and only now start to whine when it's way, way too late. The reasoning behind the law is perfectly logical, and the problem they're trying to…

>if those affected had just bothered to try.

How about: If those affected had even known that this change was happening.

I'd certainly heard that they were changing the VAT rules to crack down on the likes of Amazon. That I'd now need to charge VAT based on country of consumer. That's not the crappy part of the legislation as I currently don't need to charge any VAT at all in the UK.

I hadn't heard that my VAT threshold was being invalidated

I hadn't heard that I'd need to keep records for 10 years (currently the longest I need to keep anything is 6 years).

I hadn't heard that I'd need to register as a Data Controller (as I now need to store personal info for 10 years). This leaves me liable for massive fines if anything goes wrong security-wise in the next 10 years.

It's basically a massive cockup that was targeted at Amazon, Google, Apple and the like, but has instead hit small business startups and independent traders the hardest.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#139

Post by [deleted] »

Silhouette wrote: post #136
santacluster wrote: post #121

Earlier quoted context omitted.

The really major f-up is that of online sellers (it's a major pain for sellers of physical goods as well, it's just easier for them to at least know which country they're selling to) who did absolutely nothing during the entire process of creating and implementing this change, and only now start to whine when it's way, way too late. The reasoning behind the law is perfectly logical, and the problem they're trying to…

The really major f-up is that of online sellers ... who did absolutely nothing during the entire process of creating and implementing this change, and only now start to whine when it's way, way too late. And what exactly do you think an affected seller should have done if they had no reason to know these changes even existed ? Certain government representatives have been claiming that they have provided information a…

[deleted]

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#140

Post by reitanqild »

djrogers wrote: post #73
joosters wrote: post #58

Earlier quoted context omitted.

How is VAT regressive or hidden? For a start, I'd say that just about every EU citizen is aware of it. Plus, prices in shops have to show VAT-inclusive prices to end customers, unlike some states in the USA where sales taxes can get magically added on to the final bill. Secondly, it's not regressive because the more goods and services you buy, the more you get taxed. If I buy a luxury yacht, I'll end up paying more V…

I'd argue that showing pre-tax prices and charging tax at checkout makes the tax burden much more obvious to most consumers. Showing only the post-tax price on the tag hides the proportions of the tax vs item cost.

Obviously. It also means you can't just sum together the prices of the stuff to get the total. It annoys me seriously every time.
Post reply on HN